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Harris Associates sells remaining shares of Credit Suisse
”Harris Associates stock picker David Herro sold the firm’s entire stake in Credit Suisse Group AG, ending ties with the bank after about two decades of ownership and piling further pressure on the troubled Swiss lender’s leadership.”
"Shares of Credit Suisse have erased about 95% of their value since the summer of 2007 after years of scandals and losses."
You mean there was a towel left to throw in?
With the exception of Mass Mutual Overseas fund (rated 3* or 4* depending on share class), all of the nine funds co-managed by Herro are rated 2* or 1*. Those include his flagship OAKIX and its clone NOIAX, both rated 1*.
Still, M* analysts rate those two funds "gold". And "Morningstar named [Herro] International- Stock Fund Manager of the Year for 2006 and again for 2016, and also International- Stock Fund Manager of the Decade for 2000–09." https://www.morningstar.com/articles/812708/10-questions-with-david-herro
Continuing from that 2017 M* page:
How do you handle the scrutiny that comes with being such a large shareholder in controversial names such as Credit Suisse CSGN: CH? You stay focused on doing what is best for your clients, which means pushing managements to stay focused on long-term value creation.
Keeping your eye on the ball doesn't help when the ball keeps bouncing lower and lower.
@msf: I continue to be befuddled by M*'s romance with Harris, Oakmark, Herro, and Nygren. Does M* have no way to send these underperforming hurlers to the showers?
Do I recall correctly that CS has a connexion--- still--- to First Boston? The article was focused upon Harris/Herro, I know. Wonder why First Boston is still hanging in? Or is their stake something new?
Credit Suisse has reached an agreement with the [current] owner of the First Boston brand to use the name for its new investment bank spinoff ...
Credit Suisse took over First Boston in 1998 after forming a joint venture with the bank in 1978.
Following the takeover, the Swiss bank continued to run its investment banking activities in New York under the brand name of Credit Suisse First Boston until 2005.
...Credit Suisse was considering an option to reintroduce the First Boston brand ...
Morningstar also named Bruce Berkowitz (Fairholme) fund manager of the decade in 2010. From Morningstar website today, FAIRX trailing returns: 10 year 5.83%, 15 year 5.25% (vs. SPY 10 year 12.34% and 15 year 9.8%). I can't remember when Morningstar started negative or neutral rating on FAIRX but it wasn't till 2013 maybe. Somehow, I didn't (and I still don't) get the memo that index funds are the way to go.
@msf: I continue to be befuddled by M*'s romance with Harris, Oakmark, Herro, and Nygren. Does M* have no way to send these underperforming hurlers to the showers?
Oakmark and Oakmark International have generated good long-term returns albeit with plenty of volatility. OAKMX trailing 10 Yr. and 15 Yr. returns (through 02/28/23) beat 98% of funds in the Large Value category. OAKIX trailing 10 Yr. returns and 15 Yr. returns beat 77% and 99% of Foreign Large Value funds respectively. Since both funds are very volatile, investors may find them difficult to hold long-term.
I certainly agree with the volatility. I have been in OAKIX for a number of years, and it finally got to my stomach in October of last year. I waited for it to bounce back and sold it yesterday. Today, I will put the proceeds into ARTKX which I have also held for a number of years.
"Previous charge" makes it sound like Samra was a fund manager (even if not the lead) on OAKIX. No question about ARTKX doing better than OAKIX, just about what Samra was actually charged with at Harris.
It's true that he worked in Harris' international group, but that's as much responsibility as Sama was charged with. His name doesn't appear in any Oakmark prospectus (based on spot checking) in his Harris years of 1997-2002.
One does find statements that he worked as a portfolio manager at Harris, e.g.
Prior to joining Artisan Partners in May 2002, Mr. Samra was a portfolio manager and a senior analyst in international equities at Harris Associates LP, from August 1997 through May 2002.
I worked in the international group there with a very famous value investor, David Herro, who still operates the Oakmark International, Oakmark International Small Cap Fund. And I worked there for five years and left there in 2002. By then I had had almost 10 years worth of experience as an analyst and decided that like to try employing my own philosophy, and I found a terrific home here at Artisan. We launched the International Value Fund in 2002.
Samra was an Oakmark analyst, but analysts matter, regardless what managers may claim as the origins of their ideas. Moreover, originally much of the record of ARTKX was built by Samra with co-manager Daniel J. O'Keefe, who is another Oakmark alum that now is off the International Value fund team and is co-managing only ARTGX. But clearly, Oakmark's investment philosophy has influenced ARTKX's to a degree, only with much better results. But I admit the term "previous charge" may have been an inelegant choice of words, albeit nowhere near the Santos level.
Analysts matter greatly, and I wish fund sponsors would provide information about them as well as their management teams. My comment was intended to be narrowly focused on exactly what Samra did at Oakmark. Had he been a portfolio manager there, then Oakmark would have provided information about him.
I remain troubled by the fact that Artisan presents Samra as a former portfolio manager at Oakmark. Here's another page from Artisan, this one about their International Value Team. Here too Artisan says that Samra was a portfolio manager at Harris Associates (Oakmark).
Artisan is a little more careful elsewhere on the page, though. It writes: "Portfolio management averages more than 21 years of investment experience." While that may lead the reader to infer that the team averages 21+ years of portfolio management experience, all that it is claiming is that the team on average has been involved in professional investing for 21+ years.
Such "embellishment" is what Santos said he was doing with his CV. Artisan is embellishing; Santos was (and is) lying.
@msf I'm sorry but I don't see this as a Santos level of deception. To be honest, I don't think you do either, but for some reason you are standing by that comparison, perhaps to win an argument. If anything, Samra's record today is long enough to stand on its own and exceeds that of the fund he worked for previously certainly in recent years. (I won't use the term "previous charge" in case it's misconstrued.) So, unlike with Santos, what is the benefit to him or Artisan of any grand deception?
With possibly one exception, we're in vehement agreement.
I don't see this as a Santos level of deception
What Artisan wrote is obviously not at that level. I thought I made that clear in writing:"Artisan is embellishing; Santos was (and is) lying." Even if Artisan is lying, it's minor.
Therein lies the one possible difference in how we view this. You have carefully used the word "deception". I'm willing to opine that Artisan saying that Samra was an Oakmark manager is a lie.
As evidence of knowing falsehood I point to the Artisan legal filings where Artisan takes care to describe Samra as a former analyst for Oakmark. When someone says one thing to the public and another in legal documents (SEC filings, depositions, etc.), it's likely they know what is true and what is puffing.
Not a grand deception, but a deception nonetheless. What's the benefit? Which sounds more impressive to retail investors - that your manager came over to Artisan with previous management experience, or that he just has prior investment experience? I can turn your question around. If there's no benefit to this deception, if in fact it is nothing but a purely innocent mistake, then why hasn't Artisan corrected it?
It's not worth my time to check whether this, um, misstatement goes all the way back to 2002 when Samra jointed Artisan and it might have been more helpful to Artisan. However, supporting my speculation that mentioning Samra's history at Harris Associates (accurate or not) had more value before Samra developed a long track record with Artisan is the fact that his Harris history is included in earlier Artisan prospectuses (e.g. this 2006 prospectus), but not in the more recent ones (post 2011).
I spoke with Artisan Partners in Milwaukee. They said that David Samra was both a portfolio manager and an analyst with Harris Associates. They did not tell me which fund. They also said that the current prospectus does not have that employment history.
Call me skeptical, but it sounds like the rep just looked at the current literature, i.e. Artisan's page giving the backgrounds of its international value strategy managers and as you wrote, the current prospectus. Neither you nor the rep know whether what he was reading was correct, just that Artisan had put something on paper. And he didn't dig any further.
Artisan may not have been able to tell you what Oakmark funds it claims that Samra managed, but I can, by referencing Artisan's old prospectuses. In the final prospectus (Aug 26, 2002) before ARTKX launched (Sept 23, 2002), Artisan names a OAKIX and OAKEX as funds Samra had managed.
It looks like Artisan's legal beagles promptly went to work. The full annual Artisan prospectus put out two months later (Nov 1, 2022) dropped the claim that Samra had been an Oakmark portfolio manager by dint of his having worked in the investment team (as an analyst?).
From this point on, Artisan's prospectuses said only that Samra had been a senior analyst on these funds. Then in 2012 Artisan stopped giving Samra's Oakmark history.
A related curiosity is that Artisan didn't say anything about Samra having worked on OAKGX until it was about to launch its own global fund (2007). Then Samra's global fund history with Oakmark (as an analyst) apparently became worth mentioning.
Prospectus chronology:
August ___ 2002: Mr. Samra was a Portfolio Manager and analyst with Harris Associates L.P.
Aug 26, 2002: Mr. Samra was a Portfolio Manager and Analyst with Harris Associates L.P. ... where he was a member of the investment team managing the Oakmark International and Oakmark International Small Cap Funds.
Nov 1, 2002: Mr. Samra was employed by Harris Associates L.P. ... where he was a Senior Analyst on the Oakmark International and Oakmark International Small Cap Funds.
Jan 1, 2007: Mr. Samra was employed by Harris Associates LP ... where he was a Senior Analyst on the Oakmark International, Oakmark International Small Cap and Oakmark Global Funds.
I agree it would be interesting as a matter of curiosity to hear what Artisan would say. Though there are so many ways they could say that their statement was not false in a narrow sense that all I expect such an inquiry to accomplish would be to satisfy that curiosity.
Various possible responses:
- We stopped saying that Mr. Samra managed Oarkmark funds. Rather, (a) he worked as a manager for funds based (i.e. sold in) some foreign market (e.g. Canada, Luxemburg), or (b) he managed private portfolios of Harris clients (institutions, wealthy individuals), but not funds
Moving further down the misleading scale ... - He had no "direct management responsibilities or final decision-making authority with respect to [fund] investments". Neither do Mr. Herrick and Mr. Luciano at Artisan, and we still call them portfolio managers. Of course we identify this in the prospectus though we don't in any other fund literature, e.g. here and here.
- What we choose to call a portfolio manager and what Harris chooses don't have to be the same. We even change our own titles to make them sound better. The 2008 and 2009 prospectuses for ARTGX described Mr. Samra and Mr. O’Keefe as co-managers since the fund's inception. Starting with the Oct 1, 2009 supplement, we changed their titles retroactively. Now we describe Mr. Samra as "the Portfolio Manager of ... Artisan Global Value Fund since its inception in 2007" and Mr. O'Keefe as "the Lead Portfolio Manager of Artisan Partners’ ... Artisan Global Value Fund since the inception ...in 2007".
Too many potential explanations, none (aside from the possibility that Mr. Samra managed some foreign-based funds for Harris) ultimately satisfying.
Comments
You mean there was a towel left to throw in?
With the exception of Mass Mutual Overseas fund (rated 3* or 4* depending on share class), all of the nine funds co-managed by Herro are rated 2* or 1*. Those include his flagship OAKIX and its clone NOIAX, both rated 1*.
Still, M* analysts rate those two funds "gold". And "Morningstar named [Herro] International- Stock Fund Manager of the Year for 2006 and again for 2016, and also International- Stock Fund Manager of the Decade for 2000–09."
https://www.morningstar.com/articles/812708/10-questions-with-david-herro
Continuing from that 2017 M* page: Keeping your eye on the ball doesn't help when the ball keeps bouncing lower and lower.
Oakmark and Oakmark International have generated good long-term returns albeit with plenty of volatility.
OAKMX trailing 10 Yr. and 15 Yr. returns (through 02/28/23) beat 98% of funds in the Large Value category.
OAKIX trailing 10 Yr. returns and 15 Yr. returns beat 77% and 99% of Foreign Large Value funds respectively.
Since both funds are very volatile, investors may find them difficult to hold long-term.
It's true that he worked in Harris' international group, but that's as much responsibility as Sama was charged with. His name doesn't appear in any Oakmark prospectus (based on spot checking) in his Harris years of 1997-2002.
One does find statements that he worked as a portfolio manager at Harris, e.g. https://www.artisancanvas.com/?filter=tag+eq+artisan-canvas:authors/david-samra
Though what Samra himself says is: https://mebfaber.com/2020/04/29/episode-216-david-samra-the-primary-driver-of-our-behavior-is-finding-a-company-that-trades-at-a-discount-to-intrinsic-value/
At least he was a whole lot closer to being responsible for a fund than Santos got to working at Goldman Sachs. For all we know, Santos was just a copyboy for a company (LinkBridge Investors) that in turn did business with GS.
https://people.com/politics/fact-checking-the-george-santos-claims-from-goldman-sachs-employee-to-college-volleyball-star/
Side note: curiously, there appears to be a Jorge Santos who is a VP at GS. Scroll down to #46 in this Yahoo piece.
https://www.yahoo.com/video/the-e-mpower-top-50-future-ethnic-minority-leaders-2019-230100555.html
I remain troubled by the fact that Artisan presents Samra as a former portfolio manager at Oakmark. Here's another page from Artisan, this one about their International Value Team. Here too Artisan says that Samra was a portfolio manager at Harris Associates (Oakmark).
https://www.artisanpartners.com/individual-investors/investments/international-value-team.html
Artisan is a little more careful elsewhere on the page, though. It writes: "Portfolio management averages more than 21 years of investment experience." While that may lead the reader to infer that the team averages 21+ years of portfolio management experience, all that it is claiming is that the team on average has been involved in professional investing for 21+ years.
Such "embellishment" is what Santos said he was doing with his CV. Artisan is embellishing; Santos was (and is) lying.
I don't see this as a Santos level of deception
What Artisan wrote is obviously not at that level. I thought I made that clear in writing:"Artisan is embellishing; Santos was (and is) lying." Even if Artisan is lying, it's minor.
Therein lies the one possible difference in how we view this. You have carefully used the word "deception". I'm willing to opine that Artisan saying that Samra was an Oakmark manager is a lie.
As evidence of knowing falsehood I point to the Artisan legal filings where Artisan takes care to describe Samra as a former analyst for Oakmark. When someone says one thing to the public and another in legal documents (SEC filings, depositions, etc.), it's likely they know what is true and what is puffing.
Not a grand deception, but a deception nonetheless. What's the benefit? Which sounds more impressive to retail investors - that your manager came over to Artisan with previous management experience, or that he just has prior investment experience? I can turn your question around. If there's no benefit to this deception, if in fact it is nothing but a purely innocent mistake, then why hasn't Artisan corrected it?
It's not worth my time to check whether this, um, misstatement goes all the way back to 2002 when Samra jointed Artisan and it might have been more helpful to Artisan. However, supporting my speculation that mentioning Samra's history at Harris Associates (accurate or not) had more value before Samra developed a long track record with Artisan is the fact that his Harris history is included in earlier Artisan prospectuses (e.g. this 2006 prospectus), but not in the more recent ones (post 2011).
Artisan may not have been able to tell you what Oakmark funds it claims that Samra managed, but I can, by referencing Artisan's old prospectuses. In the final prospectus (Aug 26, 2002) before ARTKX launched (Sept 23, 2002), Artisan names a OAKIX and OAKEX as funds Samra had managed.
It looks like Artisan's legal beagles promptly went to work. The full annual Artisan prospectus put out two months later (Nov 1, 2022) dropped the claim that Samra had been an Oakmark portfolio manager by dint of his having worked in the investment team (as an analyst?).
From this point on, Artisan's prospectuses said only that Samra had been a senior analyst on these funds. Then in 2012 Artisan stopped giving Samra's Oakmark history.
A related curiosity is that Artisan didn't say anything about Samra having worked on OAKGX until it was about to launch its own global fund (2007). Then Samra's global fund history with Oakmark (as an analyst) apparently became worth mentioning.
Prospectus chronology:
That is correct and why I said, "They said" and They also said". Thank you for making the time to dig.
Various possible responses:
- We stopped saying that Mr. Samra managed Oarkmark funds. Rather,
(a) he worked as a manager for funds based (i.e. sold in) some foreign market (e.g. Canada, Luxemburg), or
(b) he managed private portfolios of Harris clients (institutions, wealthy individuals), but not funds
Moving further down the misleading scale ...
- He had no "direct management responsibilities or final decision-making authority with respect to [fund] investments". Neither do Mr. Herrick and Mr. Luciano at Artisan, and we still call them portfolio managers. Of course we identify this in the prospectus though we don't in any other fund literature, e.g. here and here.
- What we choose to call a portfolio manager and what Harris chooses don't have to be the same. We even change our own titles to make them sound better. The 2008 and 2009 prospectuses for ARTGX described Mr. Samra and Mr. O’Keefe as co-managers since the fund's inception. Starting with the Oct 1, 2009 supplement, we changed their titles retroactively. Now we describe Mr. Samra as "the Portfolio Manager of ... Artisan Global Value Fund since its inception in 2007" and Mr. O'Keefe as "the Lead Portfolio Manager of Artisan Partners’ ... Artisan Global Value Fund since the inception ...in 2007".
Too many potential explanations, none (aside from the possibility that Mr. Samra managed some foreign-based funds for Harris) ultimately satisfying.